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Statement of Intent 2018 - 2021
2
Rotorua Economic Development Limited | 2
RotoruaNZ.com
8HE MIHI
Vision 2030 - the Rotorua Way
This is our home.
We are its people.
We’re the heart of Māori culture and expression.
We’re innovative and we share what we learn.
We’re driving opportunity, enterprise and diversity.
We’re supporting a legacy of sustainability for our environment.
Rotorua is a place for everyone …. Tatau, tatau – We together.
Koinei tō tātau kāinga.
Ko tātau ōna tāngata.
Nā tātau tonu i ora ai te ahurea Māori me ōna āhuatanga katoa.
He iwi auaha tātau e tuku nei i tā tātau e ako nei.
E kokiri nei tātau i te angitu, i te hihiri me ngā rerekētanga maha.
E kaha tautoko nei tātau i whakapūmautanga o te taiao.
Mō te katoa a Rotorua…Tatau tatau
Cover page image, Ohinemutu at Dawn, Adrian Hodge
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FOREWORD
This Statement of Intent (SOI) sets out the strategic framework, activities and performance measures for
Rotorua Economic Development Limited (RED) for the next three years in order to deliver on our
objectives, and contribute to the Rotorua Lakes Council’s targets and priorities. The content of this SOI
for 2018-2021 reflects the continued evolution of RED’s role and focus from an approach weighted
towards visitor services and promotion to one which provides an increasingly balanced and fully
leveraged portfolio of business and tourism growth, and investment attraction aligned with destination
management.
RED Ltd will continue to work as a key partner in Council’s economic development components of the
Rotorua 2030 Vision to help deliver transformational shift with particular focus on helping with 3 of
Rotorua’s 7 Goals:
Business innovation and prosperity ... Whakawhanake pākihi:
Employment choices ... He huarahi hōu:
Outstanding places to play…Papa whakatipu.
making best use of the opportunities afforded by 3 of the City’s 4 key strengths:
Active environment – Toitū te whenua
Diverse opportunities - Tupu ki roto, tupu ki waho
Strong culture - Toitū te tangata
and supporting 3 of the City’s Big Move Projects:
Lakefront revitalisation
Bi-lingual Rotorua
Whakarewarewa Forest
To this end, during 2018/19 we will undertake a range of projects in the collaborative spirit of
Kotahitanga with our broad range of partners, including other Council Controlled Organisations
(CCOs), central government, Iwi, industry organisations, education and training providers, private
businesses and not for profit groups.
RED also acknowledges the Rotorua Lakes Council’s formal partnership model with Te Arawa and the
intention of establishing an enduring partnership which creates a future that benefits the whole
community.
Our focus will be on fully leveraging our relationships with partners to ensure maximum value for money
from our activities for the people of Rotorua.
We are committed to focusing on significant interventions that will leave a lasting legacy for Rotorua and
New Zealand. We are pleased to present this document as our statement of this commitment.
Peter Stubbs Michelle Templer
Chair Chief Executive
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TABLE OF CONTENTS
He Mihi ............................................................................................................................................................... 2 1. Foreword ................................................................................................................................... 3
1. Introduction .............................................................................................................................. 5
2. Rotorua Economic Development Limited ........................................................................... 6
3. RED Operating Principles ...................................................................................................... 10
4. Key Priorities and Objectives ................................................................................................ 11
5. Performance Outlook ........................................................................................................... 14
6. Summary of Financials .......................................................................................................... 20
7. Governance ........................................................................................................................... 22
8. Responsibility to Shareholder ............................................................................................... 26
9. Health and Safety .................................................................................................................. 27
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1. INTRODUCTION
Rotorua Economic Development Ltd (RED) is a Council Controlled Organisation (CCO), 100% owned
by Rotorua Lakes Council (RLC). This Statement of Intent (SOI) is prepared in accordance with
Section 64(1) of the Local Government Act and sets out at a high-level the CCO’s objectives, the
nature and scope of the functions to be undertaken and the targets and other measures by which
the performance of the company will be judged in relation to the CCO’s contribution to Council’s
expectations.
RED is the Economic Development Agency (EDA) and Regional Tourism Organisation (RTO) for the
Rotorua district. RED’s key trading activities and brands are Destination Rotorua, i-SITE,
Rotoruanz.com and Famously Rotorua.
RLC is responsible for setting the economic development direction for Rotorua, with RED responsible
for supporting the development of insights and an ecosystem that encourages business growth and
destination development.
RED is led by Chief Executive Michelle Templer, and governed by an independent board of directors,
its activities as agreed with RLC are outlined within this Statement of Intent.
Te Puia, Pohutu Geyser
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2. ROTORUA ECONOMIC DEVELOPMENT LIMITED
2.1 The Organisation
Our Purpose
To help improve the Rotorua economy, its ability to create employment, wealth and wellbeing for all of
our people.
Rotorua Economic Development Limited was created 01 July 2016 following a review of economic
development services which resulted in the Council resolving to integrate the functions of the former
economic development CCO Grow Rotorua, destination marketing business unit Destination Rotorua and
visitor services (i-SITE).
2.2 The Directors
The RED Directors are as follows:
Mr Peter Stubbs (Chairman)
Mr Chris Auld (Director)
Ms Mere George (Director)
Mr Andy Higgs (Director)
Mr James Fitzgerald (Director)
Ms Charlotte Schimanski (Board observer)
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2.3 RED Strategic Alignment
RED Ltd will continue to work as a key partner in Council’s economic development components of the
Rotorua 2030 Vision to help deliver transformational shift with particular focus on helping with 3 of
Rotorua’s 7 Goals:
Business innovation and prosperity ... Whakawhanake pākihi:
Employment choices ... He huarahi hōu:
Outstanding places to play…Papa whakatipu.
while making best use of the opportunities afforded by 3 of the City’s 4 key strengths:
Active environment – Toitū te whenua
o Develop innovative land uses to enhance the productive value
Diverse opportunities - Tupu ki roto, tupu ki waho
o Develop infrastructure, land and people to support a diverse and sustainably growing
community
o Grow the value of tourism to Rotorua
o Become a globally recognised centre of excellence for forestry science and innovation
o Activate waterfront development opportunities
Strong culture - Toitū te tangata
o Support growth aspirations of Te Arawa partnership
o Establish the district as a centre of Māori story telling
o Support events and festivals that enhance the district’s identify and reputation
o Support the development of Destination Brand
and supporting 3 of the City’s Big Move Projects:
Lakefront revitalisation
Bi-lingual Rotorua
Whakarewarewa Forest Master Plan
In addition RED will:
o Contribute to economic development and growth of the film industry in the Rotorua region
by working alongside and supporting the BOP Film Trust.
o Work with the Bay of Connections and regional Ministry of Business Innovation and
Employment officials to promote Rotorua priorities in key sectors and strategies.
o Support Rotorua Reorua (Bi-lingual Rotorua) alongside Te Tatau O Te Arawa and other key
stakeholders. This includes engaging in phase two of the proposed business plan for Rotorua
Reorua, and identifying ways which RED can support the implementation of Rotorua Reorua
across RED operations and the community.
RED cannot spark economic development on its own; there are a number of critical contributors in both
the public and private sector who all need to perform if Rotorua is to achieve its 2030 Vision aspirations.
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2.4 How we will achieve our purpose
This strategic framework has been developed to support RED’s Statement of Intent - a document required
under the Local Government Act which outlines the objectives, activities, scope and targets for the CCO
for a three year period.
It is designed to communicate and articulate RED’s role to all stakeholders within Rotorua’s business,
tourism, education and wider communities. It also outlines RED’s alignment with and support for Rotorua
Lakes Council’s 2030 Vision for Rotorua.
To achieve Our Purpose in 2.1 requires:
o Taking a leadership and advocacy role for Rotorua businesses and operations on a local,
national and international stage
o The effective and efficient management and development of Rotorua as a destination for all
businesses, operations, employees and investment
o Supporting existing businesses to achieve growth
o Developing effective intelligence to identify potential challenges and opportunities, and
implementing strategies in order to leverage and address these
o Facilitating connections and conversations between local, national and international
partners and stakeholders, and empowering businesses and organisations to create new
opportunities
o Protecting, managing and growing Rotorua’s brand in all aspects, and developing and
leveraging the district’s unique selling propositions
Renewed structure and revised framework
Under the overarching umbrella of “destination development”, RED has two core areas of activity -
Business Development and Investment Attraction.
Business Development covers both generic and specific sector programmes, designed to support
existing businesses to grow and develop. It is more effective to grow existing businesses to improve the
economy, so the focus is on creating the right environment for that to occur, for example, talent
attraction, Accelerate courses, marketing etc.
Investment Attraction involves fostering networks, relationships and joint ventures, developing and
attracting new developments and investment and working with Te Arawa to support its commercial
objectives. At the same time, there is a focus on positioning Rotorua as a unified, reliable, growing and
robust district that can confidently deliver on the opportunities available.
These two core areas of activity cover all key business sectors, including Tourism, Forestry and Wood
Processing, Education, Agriculture and Emerging Sectors/Land Use and the Māori economy. It also
includes “enabling” activities designed to support the district’s businesses and their objectives, for
example, addressing housing growth through liaison with developers and creating career pathways via
industry centres of excellence.
RED continues to undertake its traditional RTO visitor activities, including managing the i-SITE, international
trade promotion and liaison, the domestic Famously Rotorua campaign and supporting activities and
providing leadership to position Rotorua at the forefront of the industry.
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This activity is now undertaken within the context of a wider economic development framework to
ensure greater value and growth in the visitor economy, with focus on a transition from a volume based
to a value based strategy that delivers more for operators, the local economy and the destination.
In order to deliver on its strategic objectives - and following on from its initial establishment structure - RED
has realigned its operating structure into four, closely linked delivery groups, each with responsibility for
Specific relationships and activity areas:
Visitor services: business to customer to consumer
Destination marketing, communications and PR: business to consumer and stakeholder
Commercial: business to business
Investment, business growth and intelligence: broader economic community including business,
investor, sector groups and stakeholders
Supporting the overarching role of destination development are two core areas of activity - business
development and investment attraction. In turn, these are supported by four operational delivery
groups within RED (these are outlined further below).
Destination DevelopmentLeadershipBusiness development and growthInvestment attractionBrand custodian
Business developmentGeneric and specific sector programmesTourism and visitor economy including health and wellbeing and contemporary Māori cultureForestry and wood processingEducationEmerging sectors (functional foods and nutriceuticals, advanced manufactured products) Te Arawa relationship
Visitor Services
I-Site
Rotorua retail
Rotorua education network
Destination marketing, comms and PR
Domestic campaign
Rotorua place making
Spa and wellness
Mountain biking
Contemporary Māori culture
Lakes and forest
Investment attraction
Networks and relationships
Joint ventures
New developments
Te Arawa relationship
Commercial
International trade
Education
Business events
Investment, business growth and intelligence
Accelerate course
Business insights
Investment
High performance institute
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3. RED OPERATING PRINCIPLES
The Board acknowledges that as part of the Council resolution to establish the CCO, the entity has to be
flexible around its service delivery using a combination of facilitation, coordination and working in
partnership with other organisations or sector groups. In meeting this challenge the CCO will adhere to
the following guiding principles in fulfilling its role:
Partnering with public and private sector organisations to create a platform for private sector
investment
Identifying and validating potential areas of focus that will support private sector investment, ensuring
that robust information is provided to assist decision making
Assisting with the reduction of regulatory barriers
Being business insights and intelligence led
Delivering value for money
Applying commercial disciplines
Not duplicating or competing with the activities of the private sector
Ensuring a disciplined approach to the delivery of services
Driving a customer centric approach to seamless service delivery
Contributing to the goals and objectives of the Te Arawa Partnership Agreement
Destination Development is part of our DNA to deliver value to the Rotorua economy
Create a High Performance Culture within RED so strong that it fosters and attracts top talent
Lake Rotokakahi Green Lake, Charlaine Croguennec
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4. KEY PRIORITIES AND OBJECTIVES
Our services will be aimed at contributing to the achievement of the following priority outcomes as a
reflection of the Council’s expectations of the CCO:
4.1 Business Development
Objective
To provide support for growth of businesses and organisations through market insights, intelligence and
connectivity.
Priority
Support the capability and capacity of businesses1 and encourage development of new business.
Outcomes
RED’s activity areas are focused on contributing to the following business development related outcomes:
A coordinated and unified Rotorua business network to foster connectivity, issues management
and collaboration.
Access to a range of valued business growth and innovation services tailored to address Rotorua
business capacity and capability needs that accelerate growth and improve competitiveness.
Market insights that support quality decision making, reduce risk focused on building resilience and
improved productivity.
Leverage opportunities for increasing awareness and/or the creation of a Centre of Excellence in
forestry, wood processing, thermal wellness and visitor economy.
Impact
Significant positive impact on the Rotorua economy and its ability to create employment and wealth.
1 Businesses that have an aspiration to grow, create employment opportunities, transfer new skills or technologies and earn revenue from outside of the Destination.
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4.2 Investment Attraction
Objective
Our location, land, infrastructure, and people (tangata whenua) come together to create diverse
opportunities within an active environment.
Priority
Support local companies and organisations to encourage investment and attract new investment in
Rotorua’s areas of focus and competitive advantage.
Outcomes
The CCO activity areas are focused on contributing to the following investment attraction related
outcomes:
Rotorua being recognised as an attractive and viable investment destination in areas of
competitive advantage with a particular focus on the following priority areas:
o Tourism and visitor economy including health and wellbeing and contemporary Māori
culture
o Forestry and wood processing
o Education
o Emerging sectors (functional foods and nutraceuticals, advanced manufactured
products)
o Investments that will complement the Te Arawa asset base and future aspirations
Where potential growth opportunities are identified there is a robust and disciplined investment
opportunity analysis, case development and promotion process in place to support commercial
investment realisation and decision making.
Support for current businesses in the attraction of investment, or the removal of barriers, for growth
and retention.
Enhancing confidence in Rotorua as a business destination with local, prospective businesses,
investors and influencers through quality market intelligence, insights and advice.
Ensuring there is a coordinated and strengthened Rotorua business investment support service
network.
Destination development programs linked to improving the desirability of Rotorua as a place to
invest, do business, live and visit.
Impact
Improved vibrancy and resilience, in addition to significant impact on the Rotorua economy and its ability
to create employment and wealth.
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4.3 Tourism Growth
Objective
Position Rotorua as a leader in authentic visitor experiences that embrace manaakitanga and support a
sustainable, growing visitor economy.
Priority
Grow the Visitor Economy, and deliver quality visitor services and experiences.
Outcomes
The CCO activity areas are focused on contributing to the following tourism growth related outcomes:
Target of $1.5 billion in Visitor Expenditure by 2030.
Enhanced position of Rotorua as a premium visitor destination.
Provision of destination marketing and management programs designed to deliver greater visitor
expenditure and improved visitor experiences and satisfaction.
Rotorua being recognised as an attractive and viable Tourism industry investment destination.
Creating value for tourism partners through the Rotorua Tourism and Investment Partnership
program.
Develop Rotorua’s visitor proposition to attract and grow business year round.
Rotorua recognised as a leader in business events and conference delivery.
Support the leverage of Council and private sector led major events.
i-SITE services self-sustainable.
Support pathways and initiatives to foster our young talent into the Visitor sector to support an
authentic Rotorua experience and storytelling.
Impact
Growth of the largest employment sector in Rotorua, including increased contribution to Destination GDP.
Visitor spend is a major positive contributor to growth of retail and hospitality sectors with significant positive
indirect impact on other sectors of the economy.
Tourism promotion also has a positive influence on perceptions of the destination as a place to live, work,
invest and learn.
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5. PERFORMANCE OUTLOOK
The board proposes a two-phase approach to monitoring the performance of the CCO designed to
reflect Council expectations.
Phase-One is a set of organisation-wide performance measures and targets which are within the CCO’s
control and form the basis for accountability to delivering on the priority outcomes in the areas of Business
Development, Investment Attraction and Tourism Growth.
Phase- two is a set of key monitoring indicators that reflect outcomes at the regional level which are
impacted by a range of factors outside of the CCO’s direct control but which the CCO aims to influence
at a local level, where possible, through their activity.
Progress against these performance measures and indicators will be monitored by the board on a regular
basis and reported to council and stakeholders on a quarterly basis.
The board proposes the following as the controllable organisation-wide performance measures to form the
basis for accountability to the Shareholder. The detail of these performance measures will be captured in
the separate funding agreement and progress against targets will be reported to council and stakeholders
on a quarterly basis.
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5.1 Key Performance Measures
Key
Performance
Measure
Measure
2016/17
Actual
2017/18
Forecast
2018/19
Target
2019/20
Target
2020/21
Target
GROW THE VISITOR ECONOMY
Promote and
develop
Rotorua as a
national and
international
visitor and
business
events
destination
i-SITE trading revenue
increase by 5% (by
2020)
New
measure
New
measure
+2%
+5%
+5%
i-SITE Commission
received increase by
2%
New
measure
New
measure
+2%
+2%
+2%
i-Site number of
customers satisfied with
visitor information
centre services
(customer radar
measure)
89%
94%
90%
90%
90%
Business Events - Value
of bids won in financial
year based on
overnight delegate
nights spend Int /dom
of $395, MBIE data and
DR lead sheet
confirmed conferences
New
measure
New
measure
$5M
$5.2M
$5.5M
Business Events –
National market share
of multi-day business
events delegate days
(CAS data)
11%
9.5%
9.6%
9.7%
9.8%
Trade – Direct tourism
impact – international
expenditure data
Rotorua (based on
MBIE statistics,
accommodation &
recreational services
and dining)
$200M
$218M
$225M
$239M
$253M
Trade – Strategic
partner direct
investment
New
measure
New
measure
$0.2M
$0.3M
$0.6M
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Key
Performance
Measure
Measure
2016/17
Actual
2017/18
Forecast
2018/19
Target
2019/20
Target
2020/21
Target
GROW THE VISITOR ECONOMY
Consumer – Impact,
total domestic
expenditure data
Rotorua (based on
MBIE statistics)
$430M
$450M
$470M
$490M
$490M
INVESTMENT ATTRACTION
Deliver
insights,
advice and
leverage
strategic
networks to
support and
enable
initiatives to
attract and
develop
investment in
the
destination
Support delivery of RLC
Big moves and projects
through providing
investment acumen
and advice including
RFP management and
engagement with
relevant networks
including central
government investment
New
measure
New
measure
opportunities
profiled for
investors, as
requested, but
with the option
to cut off at 2
opportunities
profiled for
investors, as
requested, but
with the option
to cut off at 2
opportunities
profiled for
investors, as
requested,
but with the
option to cut
off at 2
Provide relevant
Destination insights in
target sectors to
support investment and
reinvestment decision
making by business.
RED works with partners
to develop strategies
critical to deliver on
RLC Big Moves
New
measure
New
measure
Region (2)
Sectors (4)
Region (2)
Sectors (4)
Region (2)
Sectors (4)
Maintain key influencer
database to develop
Rotorua investor
ecosystem to
accelerate opportunity
identification and
conversion
New
measure
New
measure
40 key
influencers
in CRM
2 events
50 key
influencers
in CRM
2 events
60 key
influencers
in CRM
2 events
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Key
Performance
Measure
Measure
2016/17
Actual
2017/18
Forecast
2018/19
Target
2019/20
Target
2020/21
Target
BUSINESS DEVELOPMENT AND GROWTH
Support
business
development
and growth.
High Performance
Institute coaching /
aftercare beyond
ACCELERATE program
New
measure
New
Measure
5
businesses
5
businesses
5
businesses
Emerging local
businesses receive
targeted support
New
measure
10
ACCELERATE
10
ACCELERATE
10
ACCELERATE
10
ACCELERATE
BRAND CUSTODIAN
Build Rotorua’s brand and identity
Promote and
develop
Rotorua as a
national and
international
visitor,
business and
study
destination.
Support
attraction
and retention
of a skilled
workforce
and talent.
Famously campaign
– achieve an
equivalent
advertising value
ratio of greater than
$1 : $1.50
$1:$1.40
$1 : $1.50
1 : $1.70
$1 : $1.80
$1 : $2.00
Domestic consumer
perception change
in key target markets
of AKL and one
additional market
on increase in
“intend to go”
(loyalist +
considerers based
on Delve research)
AKL:52%
CHCH:23%
AKL: 53%
CHCH: 25%
WTN: 52%
AKL:54%
CHCH:26%
WTN: 53%
AKL:54%
CHCH:26%
WTN: 53%
AKL:54%
CHCH:26%
WTN: 53%
Total sessions on
www.rotoruaNZ.com
997,943
1,050,000
1,100,000
1,150,000
1,200,000
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5.2 Monitoring indicators
In addition to our performance measures, RED has identified a further set of monitoring indicators. These
indicators reflect outcomes at the regional level which are impacted by a range of factors outside of
our direct control (e.g. exchange rates, natural disasters, government policy) but which we aim to
influence through our activity. As the city’s economic growth agency, we take a leadership role in
monitoring, reporting and influencing these indicators as we can, however we do not measure the
performance of our organisation against them.
Destination Rotorua Statement of Intent
These indicators reflect outcomes at a regional level. As the district’s economic growth agency,
Destination Rotorua will monitor, report and where possible, influence these indicators at a local level,
however they are not the measure of the organisation’s performance.
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6. SUMMARY OF FINANCIALS
Council Funding CCO Budget YE June 30 2019
The total level of Council funding provided for the CCO in financial year 2018-19 to deliver on the
expected outcomes contained within this SOI is $4,319,700 million. For clarity this investment is
exclusive of any externally generated revenue by the CCO including the i-SITE, partner
programmes, and private sector joint ventures and/or agreements. The details of the terms on
which the funding is provided will be captured in a separate funding agreement between the
CCO and Council.
Ratio of Shareholders Funds to Total Assets
In accordance with Schedule 8, section 9, 1 (d). The Company’s Shareholders Funds are defined
as paid up capital, plus retained earnings and reserves. Total Assets are defined as the sum of
current assets and non-current assets. The ratio of Shareholders Funds to Total Assets is 100%
calculated by the formula Shareholders Funds/Total Assets.
Accounting Policies
The financial statements are prepared in accordance with New Zealand Generally Accepted
Accounting Practice (NZGAAP). They comply with the New Zealand equivalents to International
Financial Reporting Standards (NZIFRS), and other applicable financial reporting standards as
appropriate. The financial standards also comply with the Companies Act 2013, the Local
Government Act 2002 and the Financial Reporting Act 2013. A full set of accounting policies are
available on request, or from the “CCO” Annual Reports.
Dividend Policy
The CCO is not forecasting to generate any dividend for its shareholder over the next 3 years.
Should a situation arise where distributions to the shareholder could be considered the Board will
take into account the following elements in any distribution it may consider:
• Company’s working capital requirements
• The retention of an appropriate level of earnings for reinvestment in the business.
Acquisition and Divestment Policy
Any subscription, purchase, acquisition or divestment by the CCO of shares in a company or other
such investments in organisations will require shareholder approval.
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The following summary of financials supports the delivery of the strategic deliverables and key
performance measures for RED.
Annual Plan
Operating Budgets Long-Term Plan
2018/19 2019/20 2020/21 2021/22
Revenue $ $ $ $
Funding from Rotorua Lakes
Council 4,319,700 4,406,094 4,494,216 4,584,100
iSITE commission received 990,125 1,039,631 1,091,613 1,146,193
Trading revenue 1,100,000 1,396,849 1,466,691 1,540,026
Other revenue 556,543 500,000 600,000 700,000
Total revenue 6,966,368 7,342,574 7,652,520 7,970,319
Expenditure
Employee 3,060,286 3,050,998 3,203,547 3,363,725
Administration & office 371,600 378,464 385,603 397,623
Finance costs and charges 94,700 99,700 104,700 109,700
Council service charges 575,120 597,124 622,050 652,074
Repairs & maintenance 46,000 49,000 53,000 58,000
Operating expenses 2,763,542 3,109,964 3,224,002 3,327,196
Utilities 55,120 57,324 59,618 62,001
Total expenses 6,966,368 7,342,574 7,652,520 7,970,319
Net operating income 0 0 0 0
Other financial information
Current value of
assets
The current value of RED Ltd’s assets as 30 June 2018 was
$595,000 based on the net asset value of the RED Ltd to be
confirmed by the disclosed in the audited financial
statements.
Accounting
Policies
RED accounting policies are consistent with those of the
Rotorua Lakes Council policies.
Financial
Reporting
RED financial reporting to Council will be in accordance
with requirements of the CCO Governance Manual.
Budget allocation
from Rotorua Lakes
Council
The funding allocation from Council is based on the Long
term plan funding.
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7. GOVERNANCE
The Council has established a CCO covering the activities of:
• Business Development
• Investment Attraction
• Tourism Growth
7.1 Responsibilities of Directors
The Council has established the CCO board and, consistent with best practice, Directors are
appointed under the expectation that in undertaking their role, they will exhibit and ensure to:
Act as a board of governance for the organisation responsible for the overall direction and
control of the company’s activities, to act in the best interests of the CCO, and not act as
representatives of either their business or the sector they work in.
Assist the organisation to ensure the activities of the CCO deliver upon the SOI and funding
agreements with Council which are driven by the strategies and expectations of Council.
The board will adopt governance practices and policies that are not inconsistent with those
of Council and make the commitment to operate in a manner consistent with adherence to
the Companies and Local Government Acts and the principles of the Institute of Directors of
NZ and their four pillars of governance best practice for NZ directors.
Practice sound business in commercial undertakings, operating as an efficient and effective
business.
Implement sustainable business practices.
Assist in the development of the active Board Intern
Meeting legal requirements
The Board’s first duty is to the legal entity. In meeting this duty the Board must ensure that all legal
requirements under the relevant Acts are met and that the entity is protected from harmful situations
and circumstances in the interests of current and future stakeholders. The Board also has a
responsibility to its stakeholders to ensure that the available resources are used to deliver the right
outcomes to the right people in the right way.
In particular Directors have the following obligations:
To act in good faith in the interests of all stakeholders of RED
To exercise their powers for a proper purpose
To avoid actual or perceived conflicts of interest
To act honestly
To act with reasonable care and diligence
To not make improper use of their position or of information gained while in that role
To ensure that RED does not trade while insolvent
Board members, either individually or collectively, are potentially liable if they act illegally or
negligently.
Direction of executive performance
The Board will:
Select, monitor and if necessary replace the Chief Executive
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Provide the Chief Executive clear expectations of his/her performance.
Provide regular, honest and rigorous performance feedback to the Chief Executive on the
achievement of such expectations
Public statements
In all contact with the media the Chief Executive shall be the sole spokesperson on all operating
matters relating to RED Ltd. The Chairperson shall represent RED Ltd on all governance matters. The
Chairperson may delegate aspects of this responsibility.
Other
The Board will perform such other functions as are prescribed by law or assigned to the Board under
RED Ltd governing documents as they relate to being a Council Controlled Organisation (CCO).
7.2 Expectations of Board members
To execute these governance responsibilities Directors must, as far as practicable, possess certain
characteristics, abilities and understandings.
Fiduciary duty
Directors must act in RED’s best interest at all times regardless of personal position, circumstances or
affiliation. They should be familiar with the constitutional arrangements and fulfil the statutory and
fiduciary responsibilities of a Director.
Strategic orientation
Directors should be future oriented, demonstrating vision and foresight. Their focus should be on
strategic goals and policy implications rather than operational detail.
Integrity and accountability
Board members must demonstrate high ethical standards and integrity in their personal and
professional dealings and be willing to act on all Board decisions and remain collectively accountable
for them even if these are unpopular or if individual Directors disagree with them. Directors must be
committed to speaking with one voice on all policy and directional matters.
Informed and independent judgement
Each Director must have the ability to provide wise, thoughtful counsel on a broad range of issues. He
or she must have or develop a sufficient depth of knowledge about RED to understand and question
the assumptions, underlying strategic and business plans and important proposals and be able to form
an independent judgement on the probability that such plans can be achieved or proposals
successfully implemented. Each Director must be willing to risk rapport with fellow Directors in taking
a reasoned, independent position.
Financial literacy
Directors must be financially literate. They should be able to read financial statements and understand
the use of financial ratios and other indices used for evaluating RED’s performance.
Industry and sector knowledge
Each Director is expected to bring a level of industry and sector knowledge sufficient to contribute to
the Board’s deliberations and considerations on behalf of the organisation.
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Participation
Each Director is expected to enhance the Board’s deliberations by actively offering questions and
comments that add value to the discussion. Each should participate in a constructive manner that
acknowledges and respects the contribution of others at the table, including the executive team.
7.3 Governance process policies
Policies are to be clear, unambiguous and provide continuity and a consistent point of accountability.
RED acknowledges Māori as tangata whenua, accepts Te Tiriti/The Treaty as a founding document of
the nation and acknowledges its responsibility to ensure Māori needs are met in culturally appropriate
ways.
An essential element in the Board’s leadership role is its responsibility to set the strategic direction for
RED, identify organisation priorities and monitor progress against the strategic goals and objectives.
The Board has a core duty to ensure the financial integrity and viability of RED and to ensure the
organisation’s funds are used for the purposes for which they have allocated. This requires oversight
of financial performance and annually approving the financial budget.
The Board will identify and evaluate the principal risks faced by RED and ensure that systems are in
place to avoid or mitigate the risks including the protection of intellectual capital.
The Board may establish standing committees and working parties to support it in its governance work,
provided they do not conflict with the Chief Executive’s delegated responsibilities.
The majority of Board business will be conducted in Board meetings.
The Chairperson provides leadership to the Board, consistent with its policies and represents the Board
and the organisation to outside parties. It is expected that the Chairperson will promote a culture of
stewardship, collaboration and co-operation, modelling and promulgating behaviors that define
sound Board membership.
The Board delegates to the Chief Executive responsibility for implementation of its strategic
direction/strategic plan while complying with the Chief Executive delegation policies.
7.4 Rotorua Economic Development Governance Model
As part of establishing the CCO, it was identified that there was a need to have a governance
structure that clearly shows the CCO’s relationship with Council and other key stakeholders. The
adopted governance model follows:
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Central to the proposed governance model is a clear distinction between responsibilities for setting
strategic direction versus the implementation of that direction. The model reinforces Council’s overall
role to set strategy and priorities and as the shareholder monitor delivery. To support Council in its role
and consistent with Council’s portfolio approach, an Economic Development Advisory Group has been
established.
The role of this group is fundamental to the success of the CCO and a strong relationship will be
maintained through the Chair of the CCO being a member of the Advisory Group.
7.5 Economic Development Advisory Group Role (EDAG)
• To strengthen Council’s role in leading the development of strategy and establishing economic
development priorities.
• To complement Council’s formal shareholder relationship with the Economic Development CCO
through:
- Oversight and ownership of the commissioning and development of the economic
development strategies;
- Providing advice to the Economic Development CCO as required;
- Advising on the funding agreement with the CCO.
• To coordinate operational activity between the functional delivery areas.
• To bring knowledge and insight about how the local business community can benefit from
Economic Development Strategies.
The model recognises that economic development services are delivered by a range of organisations,
including the core services of Council that impact upon economic development, which must operate
in a coordinated manner with aligned direction and focus if Council is to maximise the benefit from this
investment.
The board aims to ensure that the EDAG and the shareholder are informed of all major developments
affecting the CCO’s state of affairs, while at the same time recognising that commercial sensitivity may
preclude certain information from being made public. The board will adhere to a ‘no surprises’
approach in its dealings with the EDAG and its shareholder.
GOVERNANCE MODEL
Ownership & Strategy
Delivery
Partner Programmes & Advisory Groups
Economic Development CCO
Board
Core Council Delivery
Other Delivery Partners
Council
Economic Growth Advisory Group
Advice & Strategy
Formal Shareholding Relationship(SOI & Funding Agreement)
Advice
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8. RESPONSIBILITY TO SHAREHOLDER
8.1 Statement of Intent
In accordance with the Local Government Act 2002, the company submits its Statement of Intent (SOI)
for the coming financial year to the Shareholder – Rotorua Lakes Council. The SOI sets out the
company’s overall objectives, intentions and financial and performance targets for the following three
years.
8.2 Information flows and reporting
The Board aims to ensure that the Shareholder is informed of all major developments affecting the
company’s state of affairs, while at the same time recognising that commercial sensitivity may preclude
certain information from being made public. Within this constraint, information is communicated to the
Shareholder through the following:
Quarterly reporting against SOI’s performance measures and financial forecasts. Reporting to be
provided within five weeks of the end of the quarter.
Delivery of a half year report (draft by mid-February) and an annual report (draft by midSeptember
to the RLC’s Chief Financial Officer.
RED Chair and Chief Executive to meet with the Mayor and Council Chief Executive a minimum of
twice per year.
In addition, RED will proactively develop positive relationships with other local key stakeholders
(namely Rotorua Airport Limited) to ensure effective communication of the initiatives being
pursued through the implementation of the respective strategic plans.
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9. HEALTH AND SAFETY
RED is committed to driving a strategy that delivers a culture of zero harm for employees, contractors,
visitors, customers and anyone who may be affected by RED’s activities. We will do this by:
Ensuring that best practice health and safety standards are consistently applied in every
aspect of our business activities;
Complying with all health and safety obligations under relevant legislation; and
Having a safe, healthy and enjoyable environment for everyone within RED.
Whakarewarewa Forest, The Redwoods, Mark Coker
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